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In land of graft, can foreign aid find its mark?

We've all seen the images: sleazily constructed buildings collapsed on thousands of Haitians after the 7-magnitude earthquake. Meanwhile, impoverished Afghans are crushed by the cost of doing business with officials and militias who demand bribes for things taken for granted in the West.

We've all seen the images: sleazily constructed buildings collapsed on thousands of Haitians after the 7-magnitude earthquake. Meanwhile, impoverished Afghans are crushed by the cost of doing business with officials and militias who demand bribes for things taken for granted in the West.

Both countries top the list of Canada's aid beneficiaries, and both are rated among the most corrupt in the world. But as aid money pours into Haiti and Afghanistan from the international community, there is mounting concern about whether it will reach the desperate people it is meant to help.

With an urgent need for assistance in the shattered countries, there is no question of turning back the tide of international aid.

But aid experts and donors are redoubling efforts to ensure the money benefits those most severely affected by war and disaster, and meets the long-term goal of building stronger and more prosperous societies.

They also want to avoid taking over responsibility from governments that could become mere shells, dependent on foreign aid and expertise for years to come.

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"In natural disasters and post-conflict situations there are two pressures," says Christiaan Poortman of Transparency International, which studies perceptions of corruption worldwide.

"You have to push out a lot of money in a short time through limited outlets. But then you have a situation where corruption can flourish."

Billions of dollars in international funds have flowed to Afghanistan and Haiti in the past decade.

Haiti has received some $5 billion (U.S.) from international donors, including $588 million (Canadian) from Canada. At least $3 billion (U.S.) more in reconstruction pledges is expected at a fundraising conference in March.

Foreign aid for Afghanistan has totalled $25 billion (U.S.) since 2002, with an additional $20 billion pledged between now and 2013. Canada has committed more than $1 billion (Canadian) in aid since 2002.

But in both countries, images of hungry, jobless people living without basic services cast doubt on the effectiveness of aid – and raise questions about widespread corruption.

Accusations of graft by angry Afghans and Haitians make international headlines, but they're less likely to be linked with government-managed programs financed by foreign aid, experts say.

"When you monitor how money is spent through local organizations, ask to see the book receipts and ensure people are paid by checking names and dates – you know what is happening there," says Stéphane Dujarric of the UN Development Program.

"You also talk to people on the ground. And there's a third level of checking by donor countries themselves."

Ironically, experts say, programs that avoid funnelling money through reputedly corrupt governments may be more vulnerable to criminality. And funds may be wasted by hiring, housing and protecting foreign contractors.

In Afghanistan, where President Hamid Karzai's government is under intense pressure to clean up corruption, "money channelled by donors through the national budget isn't the most important source of corruption," says World Bank economic adviser William Byrd.

Diversion of national funds is less likely, he says, with a centralized payment system in place and oversight by international donors.

"When we first started helping the ministry of finance in April 2002, they couldn't issue cheques, the currency was out of control and the biggest bill was worth 25 cents," says Byrd, who has worked with Afghanistan for most of this decade.

"The first thing was to give the government the ability to manage payments and accounts, and improve the checks and balances."

Canada has made strengthening accountability and promoting law and order the top priorities in Afghanistan, as have other donors that keep a close eye on aid.

But the United Nations Office on Drugs and Crime issued a report this month that shows corruption goes far beyond government handling of aid.

"In 2009, Afghan citizens had to pay approximately $2.5 billion (U.S.) in bribes, which is the equivalent to 23 per cent of the country's GDP," it said. "Drugs and bribes are the two largest income generators in Afghanistan."

And, said the agency's executive director, Antonio Maria Costa, "it is almost impossible to obtain a public service without greasing a palm: bribing authorities is a way of life."

Haitians, too, are no strangers to corruption. From dubious building inspections to payoffs for freeing condemned criminals, corruption pervades the society and dwindles chances for a successful recovery.

"It could interfere with reconstruction," says James Dobbins, a former U.S. envoy to Haiti and Afghanistan.

"But if you're going to assist fragile states you have to accept working in a background of ineffectual and corrupt government."

Haiti has made some attempts to struggle out of the morass. In 2007, President René Préval announced a major offensive against corruption, calling those taking part "enemies of the country" who discourage badly needed investment.

"Haiti had made a lot of progress before the earthquake," said Auguste Tano Kouamé, the World Bank's lead economist for the Caribbean. "You can't expect 100 per cent transparency on everything, but it has improved economic management."

Now, he says, the rebuilding challenge for Haiti and the international community is massive.

"Things could get better, or worse, after the earthquake. Worse, because the government's ability to track expenditures is weakened, there's a loss of data, and the information base and records of expenditures are buried under the rubble."

But things could also get better, Tano Kouamé says, if international scrutiny pushes the government to crack down at all levels.

"They know they're in a fishbowl, being watched all the time. They have to show they're making good use of all the resources because they have no choice."

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